We wanted to arm our team with the tools necessary to have difficult conversations so that when the rigors of building a venture-backed business raised peoples’ hackles, that we’d know how to navigate hard conversations like bosses. Here’s a quick summary of what we learned:

1. Mind the Gap! (Inner Voices)

Imagine the following conversation:

CEO: “We’re going to triple the business this year!” Employee (says out loud): “Right on! Let’s do this thing!” Employee (inner voice says): “Good lord… how are going to do that? And my quota is going to go way up. This sucks and I’m scared!”

The gap here is palpable. If the CEO isn’t actively listening and creating opportunities to get closer to the inner voice, she or he has a real problem. The employee is rightfully showing enthusiasm and support. The CEO is hearing agreement and buy-in.

But what’s really happening here is that the employee is feeling really scared about the change that is coming.

Here’s another example, from Leah’s presentation.

Credit: Duke Corporate Education/Leah Houde

It’s important to do two things here:

Mind the Gap—Just be aware. We all have that little voice inside our heads keeping a running commentary of our lives, but if there’s a gap between what’s being said aloud and what’s being thought, you could have a serious disconnect.

Create Room for Inner Voices to be Heard—In the short term, this could be providing for truly anonymous surveys or feedback mechanisms. In the long term, it should be continuing to make deep deposits into the emotional bank accounts of employees and earning their trust over time. The more genuine vulnerability and earnest attention to people’s opinions you can show, the more the gap can shrink, because people feel that they can trust you.

Remember, the bigger the gap, the bigger the problem. Work hard to listen for that inner voice.

2. Intent vs. Impact

This is a big one. Inside our own minds, we have years of context and conditioning. We are masters of our own data and experiences. So when we act, or make a statement, we do so with all of that context… in other words, we intend to communicate a certain sentiment with the words we choose, based on what we know.

But this is problematic, because the person you are communicating with may not share your context. They may not know what you know. And so the impact of what you are saying may miss the mark.

Consider the following:

Prospective hire: “So, as a startup, how profitable are you?” CEO (enthusiastically): “We’re not profitable at all, and have no plans to be!” Prospective hire (inner voice): “I gotta get out of here… this is a sinking ship.”

In this exchange, the prospective hire is equating profitability with job security. The CEO of the startup is excited about not being profitable, because in a high-growth, SaaS business model, if all of your other metrics are right (CAC, margin, churn, and growth rates) the last thing you want to do is slow down and try to get to profitability.

The explosive growth and lack of profitability, to the CEO, is a sign of rampant success!
In this scenario, the CEO would have been better served to ask “Great question… Are you asking about the nuances of our SaaS operating metrics, or are you more concerned about our success and survivability as a firm?” This would have aligned intent before the impact of a grandiose statement scared off this prospective hire.

Remember that your intent is tied to your own contexts. Ask clarifying questions early and often when communicating so that the impact is what you wanted it to be.

3. Walk Me Down Your Ladder (of Inference)

Argyris (HBS) and Schon’s (MIT) Ladder of Inference is a construct for understanding how we as humans frame perceptions based on data that we have.

We observe data (bottom of ladder), apply reasoning based on our experiences and knowledge (middle of ladder), and then come to a conclusion (top of ladder).

We as humans evolved over millions of years to get to conclusions very quickly… and that’s healthy. Those who couldn’t quickly surmise that fast things with large teeth were likely to eat them, were removed from the gene pool. Those who could quickly arrive at this conclusion (“Danger! Run!”) passed along this hard wiring to their progeny (us!).

So… relax. It’s healthy that we quickly and automatically form conclusions. We just need to be aware of them, especially when our conclusions are causing conflict.

Using the prior example, the CEO is working from a data set that is framed by years of executive experience in SaaS. She has seen scores of examples of high growth SaaS businesses produce significant wealth by specifically not trying to achieve profitability, but instead by focusing on growth within the right SaaS metrics. The prospective hire on the other hand, may have been a part of businesses that failed because they were poorly managed, did not have access to funding, and did not achieve profitability (self sufficiency)… and as a result felt real pain when they were laid off.

In other words, these two participants are talking about the same thing, but working from different data, processing that data in different ways, and ultimately reaching different conclusions that are in conflict with one another.

What’s useful about this paradigm is that it lends itself to a phrase that can be invoked when you are in conflict or disagreement with someone.

“Hey, we’re seeing this differently. Will you walk me down your ladder and help me understand your data points and your experiences so that I can understand the conclusion you are reaching?”

I started using this phrase, “walk me down your ladder,” almost immediately in our business and to good effect. Yes, it’s a bit cheesy. Yes, it feels a bit “corporate” to say “walk me down your ladder.” But the benefit of clearly signaling that you care enough to try to understand the other person’s perspective, and that you’re willing to risk some cheesiness and business-speak to do so, is well worth it.

[Update: Since writing the initial draft of this post, I’ve had multiple Windsor Circle employees actually come tell me that they are using this technique all of the time, and not just at work. One of them shared that he and his wife were in a heated argument, and he said, “this is gonna sound dumb, but walk me down your ladder.” In a matter of minutes, they realized that they were arguing over nothing, and that by taking time to review their assumptions and underlying observations, they resolved the argument and got themselves back to a fun place instead of an angry place.]

USING THESE LESSONS AT WINDSOR CIRCLE: A CASE STUDY

We are targeting significant growth in 2015 at Windsor Circle.

We held a company wide meeting and specifically invoked these themes. We acknowledged the inner voices of our team, who have largely not been in venture-backed, high-growth start ups before and who have not seen this sort of aggressive growth in their early careers.

We did this with phrases like:

“It’s ok to be nervous about these big goals and these changes.” “The big targets are going to mean a lot of hard work, a lot of risk, and indeed, some failure! And that can be scary.” “Those of you on variable compensation targets, primarily sales, are concerned because your quotas will go up.”

We then literally used the words (because everyone was trained on them), “let us walk you down our ladder so that you can see what the management team and the investors see, and then we welcome you to draw whatever conclusions you’d like from that data and reasoning.” Certainly our hope was that our team would see what we see, but our goal was to align, not necessarily to convince.

Given the Windsor Circle core values of “openness and transparency,” and “facts, not claims,” we showed specific numbers to our entire team regarding the funding that we’re putting to work to make these growth goals a reality. We showed how dramatically we’re ramping the product team, and the investment in the marketing team. We showed comparison charts of how much more we’re investing in marketing spend and in which channels.

It doesn’t mean that people immediately snapped out of their own conclusions… that would be a silly expectation on our part as a management team. But by earnestly listening to inner voices, thinking about our intent and impact, and using the framing of “the ladder of inference” we shifted the conversation away from the fear of the unknown, and over to a reasonable discourse of why all of the data suggests that this is the right time, and the right team, with the right resources, to get this done.

We just ended December at 151% of our best month to date, and Q414 at 142% of our best quarter to date. We’re three weeks into January and we’ve already beat December. We’ve got a lot of wood to chop in 2015, but I think we’re headin’ in the right direction!